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DECREE No

DECREE No. 87-CP OF DECEMBER 19, 1996 OF THE GOVERNMENT DETAILING THE ASSIGNMENT OF RESPONSIBILITIES FOR MANAGING, DRAFTING, IMPLEMENTING AND SETTLING THE STATE BUDGET

THE GOVERNMENT

Pursuant to the Law on Organization of the Government of September 30, 1992;

Pursuant to the Law on the State Budget of March 20, 1996;

At the proposal of the Minister of Finance,

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1.- The State budget revenues shall include:

1. Taxes, fees and charges paid by organizations and individuals in accordance with the provisions of law;

2. Revenues from economic activities of the State:

- Interests on the State capital contributed to economic establishments;

- Recovery of the State capital in economic establishments;

- Recovery of the State loans (both principal and interest).

3. Revenues from non-business activities;

4. Recovery of the State reserve fund;

5. Land-use levies; incomes yielded from by public properties and land;

6. Capital raised through contributions of organizations and individuals to invest in the construction of infrastructure projects;

7. Voluntary contributions from organizations and individuals inside and outside the country;

8. Testamentary estates enjoyed by the State;

9. Revenues from the preceding year�s budget remainder ;

10. Proceeds from the sale or lease of State-owned properties in the administrative and non-business units;

11. Fines and confiscations;

12. Other revenues as prescribed by law;

13. Non-refundable aid, in cash and in kind, granted by foreign governments, foreign organizations and individuals;

14. Domestic and overseas borrowings by the Government to make up for over-spendings and the domestic investment capital mobilized by the provinces and the cities directly under the Central Government (provinces for short) defined in Clause 3, Article 8 of the Law on the State Budget shall be used to balance the budget.

Article 2.- The State budget expenditures shall include:

1. Regular spendings on:

a/ Non-business activities in the fields of education, training, health, social affairs, culture, information, physical training and sports, science, technology and environment and other fields;

b/ Non-business economic activities;

c/ Defense, security, social order and safety;

d/ Operations of the State agencies;

e/ Operations of the Communist Party of Vietnam;

f/ Operations of the Vietnam Fatherland Front, the Vietnam Confederation of Labor, the Ho Chi Minh Communist Youth Union, the Vietnam Veterans� Association, the Vietnam Women�s Union and the Vietnam Peasants� Association;

g/ Price subsidies in accordance with the State policies;

h/ National programs;

i/ Support for the social insurance fund as stipulated by the Government;

j/ Allowances for the beneficiaries of entitlement policies;

k/ Financial support for social and socio-professional organizations in accordance with the provisions of law;

l/ Payment of interests on the State�s borrowings;

m/ Aid to foreign governments and organizations;

n/ Other spendings in accordance with law.

2. Spendings on development investment:

a/ Investment in the construction of socio-economic infrastructure projects without possibility of capital recovery;

b/ Investment and capital support for State enterprises; contribution of stock and joint venture capital to the enterprises in areas that require State participation as prescribed by law;

c/ Spending on the National Investment Support Fund and Development Support Funds for economic development programs and projects;

d/ The State reserve;

e/ Government�s loans for development investment.

3. Payments of the principal of State borrowings.

4. Additional allocations to the financial reserve fund.

Article 3.- The State budget shall include the central budget and the budgets of the local administration of various levels (local budgets).

The budgets of the local administration of various levels shall include:

1. The budgets of the provinces and the cities directly under the Central Government (provincial budget for short);

2. The budgets of the districts, precincts, towns and cities under the provinces (district budget for short);

3. The budgets of the communes, wards and townships (commune budget for short)

Article 4.- The assignment of responsibilities for managing the State budget must ensure the following principles:

1. Being consistent with the State�s assignment of responsibilities for socio-economic management;

2. The central budget plays the leading role and concentrates major resources to ensure the achievement of the key national objectives;

3. Clearly determining the revenue sources and the spending tasks among the different levels and stabilizing the percentages (%) for the division of the revenues and additional allocations from the higher-level budget to the lower-level budget from 3 to 5 years. Every year, in case of price increases, additional allocations to the lower level budget shall be considered and made only in proportion to the price increases;

4. At the end of each stabilization period, basing themselves on the revenue potential and the spending needs, the Government and the provincial People�s Committees shall adjust the percentages (%) for the division of revenues among the budgets of different levels and the level of additional allocations from the higher-level budget to the lower-level budget.

Article 5.- The draft central budget and the draft budgets of various levels of the local administration may include a reserve of 3 to 5 per cent of total expenditures to meet the unexpected spending needs arising in the budget year.

Article 6.-

1. The State agencies shall, within the scope of their tasks and powers, work out necessary measures for ensuring the fulfillment of their assigned budget collection and spending tasks; practice thrift; combat corruption and wastefulness; and strictly observe financial discipline. The heads of the agencies and units shall be answerable before law for the results of the implementation of budgetary collection and spending in accordance with the provisions of law.

2. The budget drafting units, organizations and individuals must fulfill the obligation of payment to the State budget as prescribed by law; use the State budget allocations for the right purposes and according to the set regime in an economical and efficient manner. No organization or individual other than the agency competent to allocate the budget can change the assigned budget tasks.

3. The financial agencies of all levels shall, within the scope of their tasks and powers, have to urge and supervise the organizations and individuals that have the obligation to make remittances to the State budget to pay fully and in time; and shall, basing themselves on the sources of the State budget revenues, allocate fully and in time all the expenditures according to the draft budget, the regime, criteria and the work schedule.

4. Branches, agencies and units are strictly forbidden to design their own regime and criteria for the State budget collection and spending ultra vices and in contravention to the provisions of law.

Article 7.-

1. All State budget revenues and expenditures must be fully accounted for in the State budget.

The organizations and individuals tasked to collect, remit to or use the State budget must organize cost-accounting accountancy, prepare accounting reports and final accounts in accordance with the accountancy regime of the State; make full and honest final statement of accounts of all revenues and expenditures that arise; use uniform receipts and vouchers issued by the Ministry of Finance.

2. The administration of various levels, organizations and individuals are strictly forbidden to retain for themselves any State budget revenue source or to use the State budget source for setting up any fund outside the budget in contravention of Government regulations.

Article 8.- During the process of drafting, implementing and making the final statement of accounts of the State budget, the Ministry of Finance, the Ministries, branches and the People�s Committees of various levels must produce concrete explanations and supply documents related to the budgetary revenues and expenditures at the request of the Budgetary and Economic Commission of the National Assembly, the Council for Nationalities or other Commissions of the National Assembly.

Article 9.- All State budget revenues and expenditures shall be accounted for in Vietnam Dong.

The State budget revenues in a foreign currency(ies) shall be put into the concentrated foreign currency fund of the State and accounted for in Vietnam Dong in the State budget in accordance with the regulations of the Minister of Finance. State budget revenues collected by the Vietnamese representative missions abroad must be paid to the budget fund managed, by authorization of the Ministry of Finance, by these missions and must be periodically accounted for in the State budget. The State Bank shall have to buy the foreign currencies from the budget when the Ministry of Finance needs to sell them.

With regard to the requirements for State budget expenditures in a foreign currency(ies), such expenditures must be drafted, allocated and settled in Vietnam Dong and the concerned units must buy foreign currencies from the Bank, except cases of paying foreign debts in foreign currencies and a number of other special cases stipulated by the Ministry of Finance.

In cases where the State budget revenues are paid in kind, the equivalent values in cash must be calculated according to the local market price so that they can be reported in the State budget.

Article 10.- When it is necessary to adjust the approved budget estimates due to a substantial change in the State budget or the budget of a local administration of any level, the Government shall submit to the National Assembly the proposed adjustment of the draft State budget, the People�s Committees of various levels shall submit to the People�s Councils of the same level the proposed adjustment of the draft local budget.

Article 11.- In view of the specific conditions and characteristics of the commune budget, the Minister of Finance shall stipulate in detail the management of its revenues and expenditures in accordance with the Law on the State Budget; the Ministry of Finance shall coordinate with the Government Commission on Organization and Personnel in guiding the organization of the apparatus and appointment of financial personnel at commune level in order to meet the requirements in the commune budget management.

Article 12.- The socio-political organizations defined in Article 11 of the Law on the State Budget shall include:

- The Vietnam Fatherland Front;

- The Vietnam Confederation of Labor;

- The Ho Chi Minh Communist Youth Union;

- The Vietnam Veterans� Association;

- The Vietnam Women�s Union;

- The Vietnam Peasants� Association.

Article 13.-

1. The State budget shall ensure the balance of the operational expenses of the Communist Party of Vietnam and the socio-political organizations on the following principles:

The State budget shall cover the differences between the revenue sources under the prescribed regime (including the Party or association membership fees; revenues from production and business activities after fulfilling the obligation toward the State budget; other revenues in accordance with the provisions of law) and the approved draft expenditures according to the criteria, norms and regime set by the State.

2. The organizations with their operational fund supplied by the State budget must draft the plan of expenditures, execute the plan and settle the accounts in accordance with the budget management regime.

Article 14.- The operational funds of social and socio-professional organizations shall be set up on the principle of self-financing; the sources of financing of these organizations shall include voluntary contributions from their members (membership fees, cash donations and other support in cash or in kind...); financial support of organizations and individuals inside and outside the country; revenues from the production and business activities after fulfilling the obligation toward the State budget. The State shall not assign the staffing quotas and allocate operational funds to these organizations, all the operational expenses (including wage payments to full-time staff, managerial expenses, office and facility rents...) shall be covered by these organizations themselves with their own revenues.

In a number of special cases where social and socio-professional organizations conduct activities which are closely associated with the State tasks, the State budget shall provide part of the operational funds as decided by the Prime Minister.

Chapter II

ASSIGNMENT OF RESPONSIBILITIES FOR BUDGET MANAGEMENT AND THE RELATIONS BETWEEN THE BUDGETS OF DIFFERENT LEVELS

Article 15.- The revenues of the central budget shall include:

1. The revenues to be 100% paid to the central budget:

a/ Import and export duties;

b/ Special consumption tax;

c/ Profit tax paid by units where cost-accounting applies to the whole branch;

d/ Other taxes and revenues from oil and gas exploration and exploitation (including the land or water surface rent) managed by the central level;

e/ Profits from the capital contributed by the State, State capital recovered from the economic units, recovered State loans (including principal and interests), revenues from the State reserve fund, revenues from the central financial reserve fund in special cases;

f/ Government�s borrowings; non-refundable aid of foreign governments, organizations and individuals to the Government of Vietnam in accordance with the provisions of law;

g/ Fees and charges paid to the central budget: entry and exit visa fees, fees for flights across the air space of Vietnam, traffic fees and other fees and charges stipulated by the Government;

h/ Revenues from non-business activities of units managed by the central agencies;

i/ Remainder from the preceding year�s central budget;

j/ Other revenues prescribed by law.

2. Revenues divided in percentage (%) between the central budget and the provincial budget:

a/ Turnover tax except turnover tax on public lotteries;

b/ Profit tax, except profit tax of units where cost-accounting applies to the whole branch and profit tax on public lotteries;

c/ Income tax on high-income earners;

d/ Tax on profits remitted abroad by foreign organizations and individuals investing in Vietnam;

e/ Tax on natural resources;

f/ Proceeds from the use of the budget capital by State enterprises.

Article 16.- The spending tasks of the central budget shall include;

1. Regular spendings on:

a/ Non-business activities in the fields of education, training, health care, social affairs, culture, information, physical training and sports, science, technology and environment, and in other fields managed by the central agencies:

- General education boarding schools for ethnic minorities;

- Post-graduate, university and college, intermediate professional and vocational training and other forms of training and fostering;

- Disease prevention, treatment and other non-business medical activities;

- Reformatory institutions, prevention and fight against social evils and other social activities;

- Preservation of cultural relics, museums, libraries, rehabilitation of historical relics, art performances and other cultural activities;

- Radio and television broadcast and other information activities;

- Fostering and training of coaches and athletes for national teams; national and international competitions; management of physical training and sports competition centers and other physical training and sport activities;

- Scientific and technological research;

- Environmental activities;

- Other non-business activities.

b/ Non-business economic activities managed by the central agencies:

- Non-business communications activities: maintenance and repair of roads, bridges, and other traffic works, installing road signs and working out measures to ensure traffic safety;

- Non-business agricultural, irrigation, fishery and forestry activities: maintenance and repair of dikes, irrigation projects, agricultural, fishery and afforestation farms and stations; forestry, agricultural and fishery promotion activities; forest zoning for afforestation, forest protection, forest fire prevention and combat and protection of aquatic resources;

- Conducting basic surveys;

- Measuring administrative boundaries of various levels;

- Mapping;

- Measuring national boundaries and installing border markers;

- Measuring, mapping and filing land administration dossiers;

- Sedentarization and building new economic zones;

- Other non-business economic activities.

c/ Defense, security and social order and safety:

- Defense:

+ Ensuring the cultural and material life and working out policies for the entire army;

+ Training and scientific research;

+ Purchase of weapons and military equipment and facilities for the whole army, including local armies;

+ Preparing percussion caps, explosives and fuses for the production of mines and grenades to the militia and self-defense force and reserve military personnel;

+ Preparing industrial mobilization, including preparing design documents, technologies, technical implementation guidelines, preparing special-purpose instruments and various kinds of equipment only for defense purpose;

+ Long-duration military exercises (more than 5 days) of mobilized reserve units of the regular army;

+ Transferring units of militia, self-defense force, and reserve military personnel from one province to another;

+ Building new and repairing special military projects, combat installations, head offices, camps and military storehouses of the military offices of district level upward;

- Social security, order and safety:

+ Ensuring the material and cultural life and social policies for the people�s police force;

+ Training and scientific research;

+ Purchase of equipment, weapons and specialized facilities for the people�s police force;

+ Controlling and educating convicts;

+ Fire prevention and extinction;

+ Building new and repairing special constructions, barracks, head offices and storehouses of the people�s police force; repairing detention camps and reformatories of district level upward;

d/ Operations of the National Assembly, the President of the State, the Ministries, the ministerial-level agencies, agencies attached to the Government, the system of People�s Courts and People�s Procuracies;

e/ Operations of the central agencies of the Communist Party of Vietnam;

f/ Operations of the central agencies of the Vietnam Fatherland Front, the Ho Chi Minh Communist Youth Union, the Vietnam Veterans� Association, the Vietnam Women�s Union, the Vietnam Peasants� Association; operations of the Vietnam Confederation of Labor;

g/ Price subsidies in accordance with the State policies;

h/ Centrally-managed national programs;

i/ Support for the social insurance fund as stipulated by the Government;

j/ Implementing the policies toward the war invalid and sick armymen, the relatives of fallen heroes, families with meritorious services to the country and other beneficiaries of entitlement policies;

k/ Financial support for social and socio-professional organizations at central level in accordance with the provisions of law;

l/ Payments of interests on Government borrowings;

m/ Aid;

n/ Other expenditures prescribed by law.

2. Spending on development investment:

a/ Investment in construction of centrally-managed socio-economic infrastructure projects without possibility of capital recovery;

b/ Investment in and capital support for State enterprises; contribution of stock and joint venture capital to other enterprises in the areas where the State participation is needed as provided for by law.

c/ Spending on the National Investment Support Fund and development support funds for economic development programs and projects;

d/ The State reserve;

e/ Government�s loans for investment development.

3. Payments of principals for Government borrowings.

4. Additional allocations to the financial reserve fund.

5. Additional allocations to the provincial budgets.

Article 17.- The revenues of the provincial budget shall include:

1. The revenues to be 100% paid to the provincial budget:

a/ Land and water surface rents paid by enterprises, including those with 100 per cent foreign invested capital, except the land and water surface rents from the oil and gas exploration and exploitation activities managed by the central Government;

b/ Revenues from the lease and sale of State-owned dwelling houses;

c/ Registration fees;

d/ Revenues from public lotteries;

e/ Non refundable aid, in cash or in kind, donated by organizations and individuals in foreign countries directly to the provincial level in accordance with the provisions of law;

f/ Fees and charges paid to the provincial budget as stipulated by the Government;

g/ Money mobilized by organizations and individuals to invest in the construction of infrastructure projects as stipulated by the Government;

h/ Voluntary contributions from organizations and individuals inside and outside the country to the provincial budget;

i/ Revenues from the provincial financial reserve fund in special cases;

j/ Non-business revenues of units managed by the provincial level;

k/ Revenues from the investment loans in accordance with the provisions of Clause 3, Article 8 of the Law on the State Budget;

l/ Remainder from the preceding year�s provincial budget;

m/ Other revenues in accordance with the provisions of law;

n/ Additional allocations from the central budget.

2. Revenues divided in percentage (%) between the central budget and the provincial budget:

a/ Turnover tax, except turnover tax on public lottery activities;

b/ Profit tax, except profit tax paid by units where cost-accounting applies to the whole branch and profit tax on public lottery activities;

c/ Income tax on high-income earners;

d/ Tax on profits remitted abroad by foreign organizations and individuals investing in Vietnam;

e/ Tax on natural resources;

f/ Proceeds from the use of the budget capital by State enterprises.

3. Revenues divided in percentage (%) between the provincial budget, the district budget and the commune/township budget:

a/ Tax on the agricultural land use;

b/ Tax on transfer of the land-use right;

c/ House and land tax;

d/ Land use levies.

Article 18.- The spending tasks of the provincial budget shall include:

1. Regular spending on:

a/ Non- business activities in the fields of education, training, health, social affairs, culture, information, physical training and sports, science, technology and environment, and other non-business activities managed by the provincial agencies:

- General education, complementary education, crèche, kindergarten education and general education boarding schools for ethnic minorities and other educational activities;

- Post-graduate, university and college, intermediate professional training, vocational training and other forms of training and fostering;

- Disease prevention, treatment and other medical activities;

- Reformatory institutions, social relief, famine relief, prevention and fight against social evils and other social activities;

- Preservation of cultural relics, museums, libraries, art performances and other cultural activities;

- Radio and television broadcasts and other information activities;

- Fostering and training of coaches and athletes for provincial teams; provincial competitions; management of physical training and sports facilities and other physical training and sport activities;

- Scientific research and application of technical advances, other non-business scientific and technological activities;

- Environmental activities;

- Other non-business activities.

b/ Non-business economic activities managed by the provincial agencies:

- Non-business communications activities: maintaining and repairing roads, bridges, and other traffic works, installing road signs and working out measures to ensure traffic safety;

- Non-business agricultural, irrigation, fishery and forestry activities: maintenance and repair of dikes, irrigation projects, agricultural, fishery and afforestation farms and stations; the forestry, agricultural and fishery promotion work; forest zoning for afforestation, forest protection forest fire prevention and combat, protection of aquatic resources;

-Urban administrative work (in the cities directly under the Central Government, except the area assigned to the provincial town): maintenance of the lighting system, pavements, water supply and drainage system, urban traffic, parks and other urban administrative activities;

- Measuring, mapping and keeping land administration documents;

- Conducting basic surveys;

- Other non-business economic activities.

c/ Defense, security and social order and safety, including:

- Defense:

+ Training militia and self-defense force;

+ Organizing conferences, military training and work reviews;

+ Operations of self-defense force units that perform on a rotary basis full-time combat duty or combat readiness in the key border and coastal areas in a number of cases under the direction of the Ministry of Defense;

+ Drawing up the regional defense plan;

+ Transporting weapons, military equipment and supplies for the militia and self-defense and reserve forces;

+ Organizing receptions of returning armymen who have fulfilled their military service.

- Social security, order and safety:

+ Supporting the campaigns to prevent and control crime;

+ Supporting the campaigns to maintain security and social order and safety;

+ Supporting fire prevention and combat work;

+ Supporting the repair of houses for temporary detention and custody;

d/ Operations of the State agencies of provincial level;

e/ Operations of the provincial agencies of the Communist Party of Vietnam;

f/ Operations of the provincial agencies of the Vietnam Fatherland Front, the Ho Chi Minh Communist Youth Union, the Vietnam Veterans� Association, the Vietnam Women�s Union, the Vietnam Peasants� Association;

g/ Financial support for social and socio-professional organizations of provincial level in accordance with the provisions of law;

h/ Implementing the social policies managed by the provincial level;

i/ The national programs assigned by the Government to the provincial management;

j/ Price subsidies in accordance with the State policies;

k/ Payments of interests on investment loans in accordance with Clause 3, Article 8 of the Law on the State Budget;

l/ Other expenditures in accordance with the provisions of law.

2. Spending on development investment:

a/ Investment in construction of provincially managed socio-economic infrastructure projects;

b/ Investment in and capital support for State enterprises in accordance with the provisions of law.

3. Payments of the principal of investment loans in accordance with the provisions of Clause 3, Article 8 of the Law on the State Budget.

4. Additional allocations to the financial reserve fund.

5. Additional allocations to the lower-level budgets.

Article 19.- The revenues of the district budget shall include:

1. The revenue to be 100% paid to the district budget

a/ Trade-license tax, except the tax paid by small business households located in the commune/township territory;

b/ The animal slaughter tax paid by slaughtering enterprises located in the ward territory;

c/ Fees and charges collected from the activities managed by the district agencies;

d/ Proceeds from the non-business activities of units managed by the district level;

e/ Non-refundable aid, in cash or in kind, granted by organizations and individuals in foreign countries directly to the district level in accordance with the provisions of law;

f/ Contributions from organizations and individuals to invest in construction of infrastructure projects as stipulated by the Government;

g/ Voluntary contributions from organizations and individuals inside and outside the country to the district budget;

h/ Remainder from the preceding year�s district budget;

i/ Additional allocations from the provincial budget.

j/ Other revenues in accordance with the provisions of law;

2. The ratio of revenues in percentage between the provincial budget, the district budget and the commune/township budget:

a/ Tax on agricultural land use;

b/ Tax on the transfer of the land-use right;

c/ House and land tax;

d/ Land-use levies.

3. Apart from the revenues defined in Clauses 1 and 2 of this Article, the towns and cities under the provinces shall be allocated a portion in percentage (%) of turnover tax (except turnover tax on public lottery activities), profit tax (except the profit tax of the units where cost accounting applies to the whole branch and the profit tax on public lotteries), the registration fees collected in their territories.

Article 20.- The spending tasks of the district budget shall include;

1. Regular spendings on:

a/ Non-business activities in the fields of culture, information, physical training and sports , social affairs, and other non-business activities managed by the district agencies:

b/ Non-business economic activities managed by the district agencies:

- Agriculture, fishery, forestry and irrigation;

- Communications;

- Urban administrative work (applied to the budget of the towns and cities under the provinces): maintenance of the lighting system, pavements, water supply and drainage system, urban traffic, parks and other urban administrative activities;

- Other non-business economic activities.

c/ Defense, security and social order and safety, including:

- Defense:

+ Education on defense for the entire people;

+ The recruitment for the army and reception of returning armymen who have fulfilled their military service;

+ Registration of reserve military personnel;

+ Organization of training for the militia and self-defense men;

+ Meetings and military training for the militia and self-defense force.

- Social security, order and safety:

+ Educating the masses in ensuring security;

+ Supporting the campaigns to maintain security and social order and safety;

d/ The operations of the State agencies of district level;

e/ The operations of the district agencies of the Communist Party of Vietnam;

f/ The operations of the district agencies of the Vietnam Fatherland Front, the Ho Chi Minh Communist Youth Union, the Vietnam Veterans� Association, the Vietnam Women�s Union, the Vietnam Peasants� Association;

g/ Financial support for social and socio-professional organizations of district level in accordance with the provisions of law;

h/ Other spendings in accordance with the provisions of law.

2. Spending on development investment:

Expenditures on the investment in the construction of socio-economic infrastructure projects shall comply with the assignment or responsibilities by the provincial level. The responsibility assigned to the towns and cities under the provinces shall include the task of spending on the construction of State general education schools of various levels and public facilities, the lighting system, water supply and drainage system, urban traffic, traffic safety and urban sanitation.

3. Additional allocations to the provincial budget.

Article 21.- The revenues of the commune/township budget shall include:

1. The revenues to be fully paid to the commune/township budget:

a/ Trade-license tax paid by small business households;

b/ Slaughter tax;

c/ Fees, charges and contributions to the commune/township budget in accordance with the provisions of law;

d/ Proceeds from the use of the public land fund and revenues brought about by other public properties;

e/ Revenues from the non-business activities managed by the commune/township level;

g/ Voluntary contributions to the commune/township;

h/ Non-refundable aid granted by organizations and individuals in foreign countries directly to the commune/township in accordance with the provisions of law;

i/ Remainder from the preceding year�s commune/township budget;

j/ Additional allocations from the higher-level budget.

k/ Other revenues in accordance with the provisions of law;

2. The ratio of revenues in percentage (%) between the provincial budget, the district budget and the commune/township budget:

a/ Tax on agricultural land use;

b/ Tax on transfer of the land-use right;

c/ House and land tax;

d/ Land use levies.

Article 22.- The spending tasks of the commune/township budget shall include;

1. Regular spending on:

a/ Social work and activities in the fields of culture, information, physical training and sports managed by the commune/township level:

b/ Financial support for complementary education, crèche and , kindergarten education managed by the commune/township agencies:

c/ Health care activities in the commune/township;

d/ Management and maintenance of architectural works, assets, welfare works and transport routes managed by the commune/township level;

e/ The operations of the State agencies of the commune/township;

f/ The operations of the Communist Party of Vietnam, the Vietnam Fatherland Front, the Ho Chi Minh Communist Youth Union, the Vietnam Veterans� Association, the Vietnam Women�s Union, the Vietnam Peasants� Association of the commune/township;

g/ The operations of militia and self-defense force and the social order and safety work:

- Training the militia and self-defense force;

- Registering military services, organizing send-offs for young people to perform their military service duty;

- Mobilizing and educating the masses to maintain security, social order and safety.

h/ Other expenditures in accordance with the provisions of law.

2. Spending on development investment:

Expenditures on the investment in the construction of socio-economic infrastructure projects shall comply with the assignment of responsibilities by the provincial authorities.

Article 23.- Apart from the revenues and expenditures defined in Articles 21 and 22 of this Decree, the commune/township administration may mobilize the contributions from organizations and individuals to in vest in the construction of infrastructure projects of the commune/township on the principle of voluntariness and in line with the plan approved by commune/township People�s Council. These contributions must be managed in a transparent manner, must be supervised and used for the right purposes and according to the regime prescribed by law.

Article 19.- The revenues of the ward budget shall include:

1. Fees, charges and contributions to the ward budget in accordance with the provisions of law;

2. The slaughter tax, except the tax paid by slaughtering enterprises;

3. Voluntary contributions by organizations and individuals to the ward;

4. Non refundable aid granted by organizations and individuals in foreign countries directly to the ward in accordance with the provisions of law;

5. Remainder from the preceding year�s ward budget;

6. Additional allocations from the higher-level budget.

7. Other revenues in accordance with the provisions of law;

Article 25.- The spending tasks of the ward budget shall include;

1. Spending on the social work and activities in the fields of culture, information, physical training and sports managed by the ward:

2. Spending on the operation of the State agencies of the ward

3. The operation of the agencies of the Communist Party of Vietnam, the Vietnam Fatherland Front, the Ho Chi Minh Communist Youth Union, the Vietnam Veterans� Association, the Vietnam Women�s Union, the Vietnam Peasants� Association of the ward;

4. Spending on the operation of militia and self-defense force and the social order and safety work:

- Training the militia and self-defense force;

- Registering for military service, organizing send-offs for young people to perform their military service duty;

- Mobilizing and educating the masses to maintain security, social order and safety.

5. Other expenses in accordance with the provisions of law.

Article 26.- Apart from the revenues and expenditures defined in Article 17 of this Decree, the provincial administration shall be entitled to:

1. Mobilize the capital in the country for investment in the construction of infrastructure projects defined in Clause 3, Article 8 of the Law on the State Budget. The balance of the mobilized capital sources at the time of the mobilization shall not exceed 30 per cent of the annual capital construction investment capital of the provincial budget. When it needs to mobilize capital, the provincial People�s Committee shall draw up a plan and report it to the People�s Council for approval before sending it to the Ministry of Finance and the Ministry of Planning and Investment for submission to the Prime Minister for consideration and decision. The mobilized capital shall be used to balance the provincial budget and shall be spent only for the set purposes. The plan must clearly state:

- The investment project already decided by the competent agency;

- The socio-economic efficiency of the project;

- Total investment capital to be mobilized and projected sources to ensure payments for the debts of the provincial budget;

- Forms of capital mobilization; amounts to be mobilized; interest rates and the mode of payment of due debts;

- The balance of the mobilized capital;

- The balance of the current year�s provincial budget and the budgetary plan for the following years;

- Other documents clearly explaining the plan

2. Decide the additional revenues as prescribed by the Prime Minster for the construction of infrastructure projects and for given purposes. The provincial People�s Committee shall draw up a plan on mobilizing and using the additional revenues and report it to the People�s Council for consideration and decision. The additional revenue sources shall be used to balance the provincial budget and shall be spent only for the set purposes.

3. Decide the level of fees and charges to be collected in accordance with the provisions of law.

Article 27.- The setting up of the investment fund of the cities and provincial towns shall comply with a separate regulation of the Government.

Article 28.-

1. The Government shall decide concrete percentages (%) for the division of revenues between the central budget and the budget of each province or city directly under the Central Government; which shall apply to all the revenues to be divided.

2. The provincial People�s Committee shall determine the percentages (%) for the division of the revenues between the provincial budget and the budget of each district, precinct, town or city directly under the province and the budget of each commune or township. The determination of the percentages (%) of the turnover tax and profit tax defined in Clause 3, Article 32 of the Law on the State Budget must ensure that total allocations to the provincial budget and the budgets of the towns and cities under the province shall not exceed the level of these two taxes set for the province.

Article 29.- The Government shall submit to the Standing Committee of the National Assembly for decision the plan on additional allocations from the central budget to the budget of each province or city directly under the Central Government. The provincial People�s Committee shall submit to the People�s Council for decision the plan on additional allocations from the provincial budget to the budget of each district and provide for the additional allocation to each commune budget.

The Minister of Finance shall stipulate the method for calculating the additional allocations from the higher-level budget to the lower-level budget in accordance with Article 40 of the Law on the State Budget.

Chapter III

DRAFTING THE STATE BUDGET

Article 30.- Basis for drafting the annual State budget:

- The socio-economic development, defense and security tasks;

- The specific tasks of the Ministries, branches and localities;

- The assignment of responsibilities for the State budget management; the percentages (%) for the division of the revenues and the additional allocations from the higher-level budget to the lower-level budget as prescribed;

- The collecting regime; the budget spending regime, criteria and norms;

- The Prime Minister�s directive on the elaboration of the plans on socio-economic development and the draft budget for the following year; the Finance Ministry�s circular guiding the drafting of the budget and the guiding documents of the Ministries;

- The control number of the draft budget notified by the competent agency;

- The situation of the execution of the preceding year�s draft budget.

Article 31.-

1. Before June 15 every year, the Prime Minister shall issue a directive on the elaboration of the plan on socio-economic development and the draft budget for the following year to serve as a basis for drafting the State budget.

2. Basing itself on the Prime Minister�s directive, the Ministry of Finance shall guide the central agencies and the localities on the requirements, contents and time limit for drafting the State budget and shall notify the control number of the draft State budget.

3. The central agencies and the provincial People�s Committees shall base themselves on the Prime Minister�s directive, the Finance Ministry�s guidance and the specific requirements and tasks of their respective agencies and localities to provide guidance and notify the attached units and the lower-level People�s Committees of the control number of the draft budget so as to draft the budgetary revenues and expenditures within the scope of their management.

Article 32.- Requirements for the draft annual budget:

1. The draft budgets of the budget drafting agencies must comply with the regulations, the forms and time directed by the financial agency; must fully reflect the revenues and expenditures of the agencies according to the List of the State budget.

2. The draft budgets of various levels must categorize revenues by each type and expenditures by each spending area, and according to the ratio between regular spending, investment development spending and debt payment spending.

3. The draft budget must be attached with a report clearly explaining the basis of calculation.

Article 33.- Basing themselves on their production and business plans, the laws and ordinances on taxes and the regimes on the budgetary revenues, the enterprises shall register the tax amounts and other amounts payable to the budget and send them to the tax office and the agency tasked by the State to collect budgetary revenues.

Article 34.-

1. The provincial Customs Services shall draw up plans on the collection of import and export duties under their management and other import-export related revenues and send them to the General Department of Customs, the provincial People�s Committees and the provincial Financial and Pricing Services.

The General Department of Customs shall coordinate with the Ministry of Finance, the Ministry of Planning and Investment and the Ministry of Trade in making a draft on revenues from import and export duties, the special consumption tax on imports and other import-export related revenues for the whole country and send them to the Ministry of Finance for inclusion in the draft State budget and submission to the Government.

2. The local tax offices shall draw up the draft State budgets of the territories under their management and send them to the tax office of higher level, the People�s Committee and the financial agency of the same level.

Article 35.-

1. The budget drafting agencies and the State enterprises shall draft budgetary revenues and expenditures within the scope of their assigned tasks and send them to the higher-level management agency.

2. The State agency at the central and local levels shall draft the budget revenues and expenditures directly under their management, consider the draft budgets of their attached units; synthesize and draft the budgetary revenues and expenditures under their management and send them to the financial agency of the same level, and also to:

- The planning agency of the same level (for the draft expenditures on capital construction);

- The higher-level agency managing the branch or field (for the draft budget expenditures on such branch or field);

- The agency managing the national programs (for the draft expenditures in the national programs).

The agency managing the branch or field shall synthesize and draft the budgetary revenues and expenditures of the branch or field and send it to the financial agency of the same level and the higher-level agency managing the branch or field.

The draft budget revenues and expenditures must be attached with a report explaining concretely the basis for calculating each revenue or expenditure item.

Article 36.- Drafting and deciding the State budget and the budgets of various levels:

1. Drafting and deciding the commune budget:

The commune People�s Committee shall draft the commune�s budget revenues and expenditures, submit it to the commune People�s Council and report it to the district People�s Committee, and concurrently to the district Financial and Pricing Service.

Before June 15 of each year, the commune People�s Council shall decide the draft budget of the commune for the following year.

2. Drafting and deciding the district budget:

The district Financial Service shall consider the draft budgets of the units attached to the district and the revenues drafted by the tax office, draft the district budget and the plan for its distribution; synthesize and draft the State budget revenues on the district�s territory, and the district budget revenues and expenditures (including the draft budgets of the communes and the district draft budget), report them to the district People�s Committee and submit them to the district People�s Council for consideration and decision before reporting them to the provincial People�s Committee and the provincial Financial and Pricing Service, and also to:

- The provincial Planning and Investment Service (for the draft capital construction investment capital);

- The provincial Service managing the branch or field (for the draft expenditures for the branch or field managed by such Service).

Before August 31 of each year, the district People�s Council shall decide the draft district budget for the following year.

3. Drafting and deciding the provincial draft budget:

The provincial Financial and Pricing Service shall consider the draft budgets of the units attached to the province or city and the revenues drafted by the tax office or the customs office (if any), draft the provincial budget and the plan on its distribution; synthesize and draft the State budget revenues on the province�s territory, and the provincial budget revenues and expenditures (including the draft budgets of the districts and the draft provincial budget), submit them to the provincial People�s Committee which will submit them to the provincial People�s Council for consideration and decision before reporting them to the Government and the Ministry of Finance, and concurrently to:

- The Ministry of Planning and Investment (for the draft capital construction capital);

- The agency managing the branch or field (for the draft expenditures for the branch or field).

Before September 15 of each year, the provincial People�s Council shall decide the draft provincial budget for the following year.

4. Drafting and deciding the State budget and the central budget:

The Ministry of Finance shall assume the main responsibility and coordinate with the other Ministries, on the basis of the budget revenues and expenditures drafted by the Ministries, central agencies and provinces, the draft expenditures of the branches and fields and of the national programs which are prepared by the Ministries and the agency managing the national programs, the demand of debt repayment and the possibility of borrowing, in drafting the central budget revenues and expenditures, synthesizing and drafting the State budget revenues and expenditures and submit them to the Government for submission to the National Assembly for decision, shall elaborate a plan on the central budget allocation to each Ministry and branch and the amount of additional allocations from the central budget to each province before submitting them to the Government which will submit them to the Standing Committee of the National Assembly for decision.

Article 37.- Tasks and powers of the People�s Committees of various levels and the State agencies in the process of drafting, synthesizing and allocating the budget:

1. The People�s Committee:

a/ To guide, organize and direct its attached units and the lower-level People�s Committees in drafting the budget revenues and expenditures within the scope of its management; coordinate and direct the tax office and the customs office in the locality in drafting the State budget of its locality;

b/ Before submitting the draft budget to the People�s Council for decision, the People�s Committee must consult the higher-level People�s Committee (the provincial People�s Committee must consult the Prime Minister);

c/ To examine the resolution of the lower-level People�s Council on the draft budget; to request, when necessary, the lower-level People�s Council to adjust the draft budget.

2. The financial agencies of various levels:

a/ To discuss with the lower-level People�s Committees and the concerned agencies and units; to be entitled to request the amendment of revenue and expenditure items which do not comply with the prescribed regime and criteria and which are not rational, economical and suitable to the budget capability and the socio-economic development orientation before the People�s Council decides the budget; to draft annual additional allocations from the higher-level budget to the lower-level budget.

During the process of deliberation to synthesize and draft the budget, if there is a divergence of opinions between the financial agency, other agencies and the lower-level People�s Committee, the local financial agency of any level must submit the matter to the President of the People�s Committee of the same level for decision; the Ministry of Finance shall submit the matter to the Prime Minister for decision;

b/ To assume the main responsibility and coordinate with the concerned agencies and units in drawing up the plan for allocating the draft budget of its own level;

c/ To coordinate with the planning and investment agency of the same level in drafting and allocating the capital construction funds with priority to specific units, projects or constructions;

d/ To coordinate with the agency managing the national programs in drawing up the plan for allocating the draft expenditures for various units;

e/ To propose plans to balance the budget and measures to implement the policy of increasing revenues and saving on budget expenditures.

f/ The Ministry of Finance shall coordinate with the State Bank of Vietnam in elaborating the plan for borrowing loans to cover the State budget overspendings, and in estimating the level and time for making advance payments from the State Bank to make up for temporary deficits of the central budget in the year.

g/ The Ministry of Finance shall consider the resolution of the provincial People�s Council on the draft budget and, when necessary, propose to the Prime Minister to ask the provincial People�s Council to adjust the draft budget.

3. The planning and investment agencies of various levels:

a/ The Ministry of Planning and Investment shall submit to the Government the national socio-economic development plan and the major balances of the national economy, including the financial, monetary and capital construction fund balances, which shall serve as the basis for the formulation of the financial and budgetary plans; submit to the Government for submission to the National Assembly a list of the national programs and projects, key and important construction projects invested with State budget sources

b/ The Ministry of Planning and Investment and the local planning and investment agency shall, in consultation with the financial agency of the same level, assign the concentrated capital construction investment plan to each unit, each project and construction and send it to the financial level of the same level as a basis for synthesizing and drafting the budget to be submitted to the competent level for decision before allocating it to the various units.

4. The central and local State agencies:

a/ The Ministries and branches shall coordinate with the Ministry of Finance in formulating the regime, criteria and norms for the State budget expenditures of their respective branches and fields.

b/ Each central or local State agency shall organize the drafting of budget revenues and expenditures under the scope of its management, draft the expenditures for the branch or field under its charge and send them to the financial agency of the same level and the higher-level agency managing the branch or field; coordinate with the financial agency of the same level and the lower-level People�s Committee in drafting and allocating the budget of each branch or field;

c/ The agency managing the national programs shall coordinate with the financial agency of the same level in drafting the expenditures of the national programs and the plan on their allocation to various units and localities and send them to the financial agency of the same level for including them into the draft budget to be submitted together with its allocation plan to the competent level for decision and allocation to the concerned units.

Article 38.-

1. After the draft State budget is decided by the National Assembly, the Ministry of Finance shall have to:

a/ Submit to the Government the plan for allocation of the central budget to each Ministry or branch and the additional allocation from the central level to each province. The Government shall submit them to the Standing Committee of the National Assembly for decision;

b/ On the basis of the resolutions of the National Assembly and of the Standing Committee of the National Assembly, submit to the Prime Minister for decision the assignment of the budget collection and spending tasks to each Ministry or branch; the budget collection and spending tasks and additional allocations from the central budget to each province;

c/ Provide detailed guidance on budget collection and spending tasks for the central agencies, provincial People�s Committees and State enterprises.

2. In cases where a resolution of the People�s Council fails to comply with the budget collection and spending tasks assigned by the higher level, the People�s Committee shall revise the draft budget and the plan for allocating the budget revenues and expenditures and submit them to the People�s Council for decision.

3. Basing itself on the resolution of the People�s Council of the same level, the People�s Committee shall decide to assign the budget collection and spending tasks to each attached agency or unit; the budget collection and spending tasks and the additional allocation to the lower-level budget.

Article 39.-

1. When submitted to the National Assembly, the draft State budget must be attached with the necessary documents as prescribed in Article 47 of the Law on the State Budget.

2. When submitted to the People�s Council, the draft budget of the local administration of any level must be attached with the following necessary documents:

a/ A report on the situation of the implementation of the preceding year�s budget, orientations, tasks, objectives and grounds for drafting the budget and measures to implement the budget;

b/ The list of socio-economic infrastructure construction projects;

c/ The plan on additional revenues and their use;

d/ The plan for mobilizing and utilizing the contributions from organizations and individuals to construct infrastructure projects;

e/ In cases where the provincial budget needs to mobilize domestic investment capital to construct infrastructure projects managed by the provincial level, a project dossier must be submitted to the People�s Council, sent to the Ministry of Planning and Investment and evaluated by the Ministry of Finance before it is submitted to the Prime Minister for decision;

f/ Other materials clearly explaining the draft budget revenues and expenditures.

Article 40.- For the drafting of the 1997 State budget, the Prime Minister shall stipulate in details the contents and method to serve as a basis for determining the percentage (%) for the division of revenues, and the additional allocation from the higher-level budget to the lower-level budget to be kept stable in 3 years (1997-1999).

Chapter IV

IMPLEMENTATION OF THE STATE BUDGET

Article 41.-

1. After being assigned the budgetary plan by the Government and the People�s Committees, the central and local State agencies shall have to allocate the assigned draft budget to the budget using units, ensuring that the assigned draft budget is implemented correctly in terms of both total amount and each item.

2. The results of the allocation of the draft budget to the budget using units must be sent to the financial agency of the same level and the treasury where the units have an account; the financial agency shall have to examine the results and ask for readjustment whenever they are inconsistent with the contents of the draft budget assigned by the competent level.

3. The division and allocation of the draft budget to the budget using units must complete before December 31 of the preceding year.

Article 42.-

1. In cases where until the beginning of the budget year, the draft budget and its allocation plan are not yet decided by the competent State agency, the financial agency shall be allowed to make advance payments for the following spending tasks:

- Spending on wages and wage-related items;

- Spending on professional fees and official duty fees;

- A number of other necessary expenses to ensure the operation of the apparatus, excluding the expenses for purchase of equipment and repairs;

- Spending on half-completed capital construction projects invested by the State budget with an implemented volume qualified to receive payments;

- Spending on on-going projects of the national programs;

- Spending on additional allocations to lower-level budgets.

2. Each monthly advance payment shall not exceed the average monthly payment of the preceding year.

Article 43.-

1. Organizations and individuals, including foreign organizations and individuals operating on the territory of the Socialist Republic of Vietnam, shall be obliged to pay fully and on time taxes, fees, charges and other revenues to the State budget in accordance with the provisions of law.

2. When an organization or individual delays the payment of the amounts due to the State budget without a plausible reason, on the basis of the request of the competent agency defined in Clause 3 of this Article, the banks and treasuries must make deductions of the deposited money of such organization or individual to pay to the State budget or take other financial measures to collect revenues for the budget.

3. The agencies competent to request the banks and treasuries to make deductions of the deposited money of organizations and individuals to pay to the State budget include:

- The tax office and the customs office with regard to delayed payment of taxes and fees;

- The financial agency with regard to delayed payment of other revenues.

4. In cases where an organization or individual deliberately evades payments, they shall be handled in accordance with the provisions of law after their deposited money is deducted to pay to the budget.

Article 44.- All revenues of the State budget must be directly paid to the State treasury. With regard to a number of unfixed revenues from fees, charges and taxes on business households, budgetary revenues in communal areas...which, for objective reasons, cannot be paid directly to the State Treasury, the collecting agency may directly collect and pay them to the State Treasury in accordance with the regulation of the Minister of Finance.

Article 45.-

1. Only the following agencies shall be allowed to organize the collection of State budget revenues:

- The State tax office;

- The customs office;

- The financial agency and other agencies permitted by the Government or authorized by the Ministry of Finance.

2. The collecting agencies shall have the tasks and powers defined in Article 59 of the Law on the State Budget.

3. The collecting agencies must use the vouchers issued by the Ministry of Finance for collecting and paying budgetary revenues.

Article 46.-

1. Depending on the borrowing purposes, the borrowings shall be used on the following principles:

- With regard to borrowings for investment projects to construct the infrastructure and socio-economic development projects eligible for State budget allocations, the Ministry of Finance shall allocate capital to them in accordance with the prescribed regime.

- With regard to borrowings for projects eligible for State credit, the Ministry of Finance shall carry out the lending.

2. The Ministry of Finance shall stipulate in details the management of receipt and allocation of foreign borrowings on the aforesaid principles and in accordance with each agreement signed with a foreign country.

Article 47.- Non-refundable aid in cash or in kind donated by foreign Governments, organizations, individuals to the Government of Vietnam, the administration of various levels and State agencies must be fully accounted for in the State budget in accordance with the following principles:

1. With regard to donations of which the users have been identified the financial agency shall complete the procedure of mutual ceasing of State budgetary resources.

2. With regard to donations of which the users are not yet identified, the financial agency shall manage and register them as budgetary revenues and at the same time determine the plan on their use in consistence with the commitments and purposes already agreed with the donors, submit them to the competent level for decision before allocating them to the using units and completing the State budge allocation procedure.

Article 48.- State budget expenditures shall be only made when the following conditions are met:

1. They are included in the approved draft State budget, except the following cases:

a/ The draft budget and the plan on its allocation not yet decided by the competent agency or the draft budget allocation must be adjusted as prescribed in Articles 56 and 62 of the Law on the State Budget.

b/ Expenditures from the budget reserve source by decision of a competent level.

2. Consistent with the regime, criteria and norms stipulated by the competent State agency.

3. Approved by the head of the budget using agency or an authorized person.

4. Apart from the conditions defined in Clauses 1,2 and 3 of this Article, in cases where the State budget allocations are to be used for investment in capital construction, for purchase of working equipment and facilities and for other activities which require bidding, the bidding must be organized in accordance with the regulations of the Government.

Article 49.- Responsibilities of the State agencies in managing and allocating State budget expenditures are specified as follows:

1. The financial agency:

a/ Supervising the draft budget allocations to the budget using agencies in accordance with Article 41 of this Decree;

b/ Notifying the quarterly expenditure norms in consistence with the contents and implementation tempo of the spending tasks within the total amount of the approved draft annual budget;

c/ Supervising the purpose and characteristics of each spending, ensuring that it meets the prescribed conditions before ordering the disbursement of the budgetary fund in cases where the financial agency is allowed to make direct allocations;

d/ Supervising the budget use in the budget using agencies and units.

2. The State Treasury agency:

Supervising spending approval orders, if the spending approval order is consistent with the spending norm notified by the financial agency and ensures the spending conditions defined in Article 48 of this Decree, the State Treasury agency must effect payments to payees.

3. Central and local State agencies:

a/ On the basis of the quarterly spending norm notified by the financial agency, they must, by authorization of the financial agency, allocate the quarterly expenditures to the attached units; at the same time send a report thereon to the financial agency of the same level and the State treasury where it has an account.

b/ Guiding, monitoring and supervising the use of the budget of the branches and fields under their management and of the attached units.

4. The budget using agencies:

a/ Approving expenditures in accordance with the regime, criteria and assigned spending norm defined by the competent agency;

b/ Managing and using the budget allocations according to the purpose and in an economical and efficient manner.

Article 50.-

1. Allocating regular expenditures of administrative and non-business units:

a/ On the basis of the allocated draft budget, the budget using units shall draft quarterly expenditures and send them to the higher-level managing agency which shall sum up and send them to the financial agency of the same level.

b/ The financial agency shall verify the draft expenditures of each budget using unit and basing itself on the budget capability allocate the spending norm to each budget using unit or to the higher-level managing agency of these units and authorize it to re-allocate the spending norm to each budget using unit, and notify the budget using units and the treasury where these units have transacted for implementation.

c/ The assigned quarterly spending norm is the maximum norm of expenditures the budget using unit can effect in the quarter.

d/ On the basis of the allocated spending norm, the head of the budget using unit shall issue a spending approval order attached with the payment documents and send them to the State treasury where the unit has its account.

e/ The State treasury, where the unit has an account, shall, on the basis of the notice on the spending norm allocated by the financial agency or the higher-level managing agency to the unit, verify the validity of the payment dossier, spending conditions and the spending approval order of the head of the budget using unit, effect the allocation and payment.

f/ The Minister of Finance shall guide the step-by-step implementation of the principle of direct payment from the State treasury to the wage-earners, suppliers or contractors.

g/ With regard to minor spendings and spendings that do not meet the conditions for direct payment, the State treasury shall make advance payments to the budget using units so that they can spend on their own initiative according to the approved draft budget , and then settle them with the State treasury as actual payments.

The Ministry of Finance shall stipulate in details the maximum advance payment amount suited to the respective operational form and scale of the budget using units.

h/ With regard to the spendings of overseas representative missions of Vietnam, basing themselves on the spending norm notified by the financial agency, these missions can withdraw money from the budgetary fund under their management by authorization of the Ministry of Finance for spending according to the approved draft budget and the prescribed regime.

2. Allocating and lending construction investment capital:

a/ Basing himself/herself on the plan on the construction investment capital from the allocated budget source, the investor shall draw up quarterly settlement plans and send them to the investment capital allocating agency (the General Department of Development Investment, the provincial Department of Development Investment or the district Department of Development Investment). The investment capital allocating agency shall consider and synthesize these quarterly plans and submit them to the financial agency;

b/ The financial agency shall verify the expenditure plan of the investment capital allocating agency and, depending on the budget capability, assign the quarterly estimated expenditures to the investment capital allocating agency, including the estimated expenditures on important projects;

c/ On the basis of the expenditures notified by the financial agency, the investment capital allocating agency shall allocate the quarterly spending norm to each investor;

d/ On the basis of the allocated spending norm and the capital construction volume eligible for payments, the investor shall send the payment dossier to the investment capital allocating agency;

e/ The investment capital allocating agency shall evaluate the payment allocating dossier and request the State treasury to make payments to the investor or to the contractor on the investor�s behalf;

f/ The Minister of Finance shall stipulate in details the method and procedure of allocating, lending and settling capital construction investment capital of the State budget in accordance with the Law on State Budget, the Regulation on the Management of Investment and Construction and the conditions of each allocation or borrowing.

3. In cases where the higher-level State management agency authorizes the lower-level State management agency to perform a spending task that comes under the former�s function, the higher-level financial agency must transfer funds from the higher-level budget to the lower-level financial agency for performing such task. The agency receiving the authorized allocation shall have to manage and use it in accordance with the State budget allocating regime and must account for and report them separately to the authorizing State agency. By December 31, the unused amount of the authorized allocation must be returned to the higher-level budget.

4. The Minister of Finance shall stipulate the mode of allocating other expenditures of the State budget.

Article 51.-

1. The Government shall adjust the draft budget allocated to the Ministries, ministerial-level agencies, the agencies attached to the Government and other central agencies; adjust the percentages (%) for the division of revenues between the central budget and the provincial budget, the additional allocation from the central budget to the provincial budget and report to the Standing Committee of the National Assembly and the National Assembly in the following cases:

a/ The National Assembly adjusts the draft State budget;

b/ There is an urgent defense or security requirement;

c/ There is a substantial change in budget revenues and expenditures compared with the allocated amounts.

2. The People�s Committees of various levels shall, within their competence, adjust the draft budgets already assigned to their attached units; adjust the percentages (%) for division of the revenues between the budgets of various levels of the local administration and the additional allocations to the lower-level budget and report to the People�s Council in the following cases:

a/ The People�s Council adjusts the draft local budget;

b/ There is a substantial change in budget revenues and expenditures compared with the allocated amounts.

3. The State agency shall adjust the draft budgets of its attached units, after consulting the financial agency of the same level, in the following cases:

a/ The Government or the People�s Committee decides to adjust the draft budget of that agency;

b/ It is necessary to re-allocate the budgets to the units.

4. With regard to a budget using unit when necessary the expenditure items shall be adjusted to meet the necessary demands, the head of the unit shall draw up an adjustment plan and report it to the higher-level management agency and the financial agency of the same level for resolution.

Article 52.- During the process of implementing the budget, if there is any change in revenues or expenditures, the Prime Minister or the President of the People�s Committee at any level shall deal with it as follows:

1. If the revenues increase or the expenditures decrease as compared with the approved draft budget, the revenue increase or expenditure reduction shall be used to cover overspending, pay debts or add to the financial reserve fund, or to increase a number of other necessary spendings but it must not be used to increase the wage fund, except for special cases permitted by a competent level.

2. If revenues decrease as compared with the approved draft budget, readjustments must be done to reduce a number of corresponding expenditures.

3. In case of an unexpected spending need outside the draft budget which can not be delayed while the reserve source fails to meet it, expenditures must be adjusted to meet such need.

4. When increasing or reducing revenues or expenditures, the Prime Minister (for the central budget) or the President of the People�s Committee (for a local budget) must report it to the Standing Committee of the National Assembly, the National Assembly or the People�s Council of the same level respectively at the next meeting.

Article 53.- All State budget using units must open accounts at the State treasury, submit to the supervision by the financial agency and the State Treasury in the process of allocating, settling and using funds.

2. The State treasury is an agency managing the State budget fund (the central budget fund and the budget funds of various levels of the local administration), manage, organize payment and regulate capital and cash in the State budget fund in a uniform manner in order to fully and rapidly collect the revenues; to meet in time payment needs of the State budget.

3. The State treasury shall open accounts at the State Bank and the State-owned commercial banks as prescribed so as to concentrate revenues, allocations and settle expenditures of the State budget. The bank where the State treasury opens its account shall have to ensure full and timely payment and regulation of cash and foreign currencies to the State treasury according to the collection and spending tasks of the State budget. The State treasury�s deposits at the banks shall be entitled to interests like economic organizations and units. The State treasury payments effected through the banks must be subject to payment fees.

Article 54.- At the end of the budget year, in the provinces which have collected import and export duties and special consumption tax more than their assigned tasks, the Government shall decide to deduct in percentage (%) part of the excess revenue as reward to the provincial budget for investment in the construction of infrastructure projects and report it to the Standing Committee of the National Assembly. The concrete use of rewards by each project, the consideration of rewards for the provincial, district and commune budgets shall be decided by the provincial People�s Committee and reported to the provincial People�s Council.

Article 55.-

1. The budget reserve shall be used to overcome the consequences of natural calamities and enemy sabotage and in cases of an urgent spending needs which have not yet been estimated or insufficiently estimated in the allocated draft budget (including the need to increase additional allocations to lower-level budgets), and when the managing agency, the budget using unit or the lower-level administration, after readjustment of the expenditure items, still cannot settle.

2. Competence to deal with such need is defined as follows:

a/ With regard to the central budget reserve, the Minister of Finance shall be entitled to decide expenditures of 1,000 million Dong or less, then sum up and report them to the Prime Minister. For expenditures above this level, the Minister of Finance shall submit them to the Prime Minister for consideration and decision;

b/ With regard to the local budget reserve, the President of the People�s Committee shall decide or empower the financial agency to decide.

3. The use of the budget reserve must comply with the conditions set for the budget spending and the budget allocation procedure defined in Articles 48, 49 and 50 of this Decree.

Article 56.- The financial reserve fund:

1. The sources for the formation of the financial reserve fund:

a/ The central financial reserve fund shall be formed from the following sources:

- Part of the revenue excess as compared with the draft central budget.

The concrete level shall be decided by the Prime Minister;

- Fifty percent (50%) of the central budget remainder;

- The amount included in the annual draft expenditures of the central budget.

The concrete level shall be submitted by the Government to the National Assembly for decision.

b/ The provincial financial reserve fund shall be formed from the following sources:

- Part of the revenue excess as compared with the draft provincial budget.

The concrete level shall be decided by the President of the provincial People�s Committee;

- Fifty per cent (%) of the provincial budget remainder;

- The amount included in the annual draft expenditure of the provincial budget. The concrete amount shall be submitted by the President of the provincial People�s Committee to the People�s Council for decision.

2. Management and use of the financial reserve fund:

a/ The financial reserve fund shall be managed at the State Treasury.

b/ The central financial reserve fund shall have the Minister of Finance as its register depositor; the provincial financial reserve fund shall have the President of the People�s Committee as its register depositor.

c/ Deductions for the setting up of the financial reserve fund shall be gradually made year by year; the maximum deduction level is 25 per cent of the annual draft budget expenditure of the corresponding level.

d/ The financial reserve fund shall be used to meet the spending needs only when the revenue sources are not yet gathered while repayment must be made within the budget year, except for special cases defined in Point e, Clause 2 of this Article.

e/ The provincial budget may borrow from the central financial reserve fund if all the provincial reserve fund has been used up. The district and commune budgets may borrow from the provincial financial reserve fund.

f/ In cases where the budget revenues collected or borrowed to cover the overspendings fail to meet the approved draft or when a natural calamity or enemy sabotage occurs and even after the budget has been adjusted and the reserve fund has been used up there remain not enough sources to meet the spending tasks:

- The Prime Minister shall decide to use the central financial reserve fund to balance the budget.

- The President of the provincial People�s Committee shall decide to use the provincial financial reserve fund to balance the budget and report it to the People�s Council of the same level and the Ministry of Finance.

Article 57.- The financial agency and the State Treasury shall have to pay fully and in time the expenditure items according to the implementation tempo and within the amount of the draft annual budget already approved and the quarterly spending norm already notified; shall be entitled to refuse expenditure items which fail to meet the conditions defined in Article 48 of this Decree but must notify in time the concerned unit of their refusal and take responsibility for such decision. If the concerned agency disagrees with the decision of the financial agency and the State Treasury, it shall be entitled to lodge its complaint with the higher-level financial agency and State Treasury agency.

Article 58.- In cases where the revenues and the borrowings in the plan of the central budged fail to be gathered according to the schedule, and after the financial reserve fund has been used up the spending demand is still not met, the Ministry of Finance shall make advance payments from the capital of the State Bank if the Prime Minister so decides and such advance payments must be reimbursed within the year.

Chapter V

ACCOUNTING AND MAKING FINAL STATEMENT OF ACCOUNTS OF THE STATE BUDGET

Article 59.- The organizations and individuals tasked to collect or pay revenues to the State budget or use the State budget funds must organize cost-accounting accountancy, prepare reports and make final statement of accounts in consistence with the State accountancy regime and the State budget classification.

Article 60.- The budget drafting agencies and the administration of various levels must organize the budget accounting apparatus and appoint the budget accounting personnel in accordance with the titles and criteria prescribed by the State accountancy regime.

Article 61.-

1. The State budget accountancy and settlement work must be implemented in a uniform way in terms of:

- The vouchers on the State budget revenues and expenditures;

- The chart of accounts, accounting books and forms for reporting budget accounts;

- The List of the State Budget.

2. The budget year shall commence on January 1 and end on December 31 of the solar year.

Article 62.- Upon the expiry of an accounting period (monthly, quarterly or yearly) the accounting units must close the accounting books. The closing of the budget accounting books at the end of the year must ensure the following requirements:

1. All revenues of the preceding years� budgets which are paid in the current year must be accounted for and paid to the following year�s budget.

2. All expenditures of the current year�s draft budget which have not yet been spent must not be carried over to the following year for further allocation. In special cases where they can be further allocated if it is so decided by the Minister of Finance (for the central budget) or the President of the People�s Committee (for the budget of the local administration of various levels), their accounting and settlement shall be implemented as follows:

- If it is decided that they be included in the preceding year�s budget expenditures, they shall be settled by the preceding year�s budget remainder and be accounted for as expenditures of the preceding year�s budget (during the time when the final accounts are adjusted);

- If it is decided that they be included in the following year�s budget expenditures, they shall be included in the draft expenditures of the following year�s budget.

3. The debts, borrowings and advance payments of the budget drafting agencies and of the budgets of the administration of various levels must be settled before the closing of the accounting books at the end of the year; in special cases, if permitted by the competent agency, the debts, borrowings and advance payments of the current year�s budget shall be carried forward to the following year�s budget.

4. The temporarily collected or withheld amounts must be concretely considered and dealt with as follows:

- To return them to the objects having the temporarily collected or withheld amounts or pay them into the State budget depending on each specific case to be decided by the competent level.

- Pending a decision to deal with them, the temporarily collected or withheld amounts shall be transferred into the account for the temporarily withheld amounts under the guidance of the competent levels.

5. With regard to the unsaleable materials and goods and the cash left-over in the funds of the budget drafting units by the end of December 31, they must be inventoried in accordance with current regulations and shall be dealt with as follows:

- The goods and materials to be used in the following year shall be settled in the current year�s budget expenditures and excluded from the following year�s budget expenditures.

- The unused goods and materials shall be accounted for and settled in the current year�s budget expenditures and a liquidation council shall be set up to sell them and the proceeds therefrom shall be paid to the following year�s State budget.

The left-over of the cash fund of a unit by December 31 belonging to the State budget funds, minus the amounts to be paid, shall be remitted to the State budget.

6. For the balance of the authorized fund (of a budget level) by the end of December 31, the State Treasury agency of the same level shall complete the procedure for returning it to the higher-level budget and report it to the financial agency of the same level. The higher-level State Treasury agency shall receive the returned amount of the authorized fund from the lower-level budget, record it as a reduction in the allocation from the higher-level budget and report it to the financial agency of the same level.

Article 63.- The time for adjusting the final accounts shall be defined as follows:

1. The time for adjusting the final accounts is the time for solving the following tasks:

- Continue to account the budget revenues and expenditures arising from December 31 backward but their supporting documents come later;

- Compare and deal with the errors during the process of cost-accounting accountancy;

- Deal with the preceding year�s budget expenditures according to the decisions of the competent levels.

2. The time for adjusting the final accounts is defined as follows:

- By the end of January 20 for the commune-level budget;

- By the end of February 15 for the district-level budget;

- By the end of February 31 for the provincial-level budget;

- By the end of March 31 for the central budget.

Article 64.- The annual final statement of accounts must ensure the following principles:

1. The data in the final statement of accounts must be accurate and conform to the data in the accounting books. The contents of the statement of the budget final accounts must conform to the contents written in the approved budget estimate and to the List of the State Budget.

2. The statements of final accounts of the budget drafting units and of the budgets of the administrations of various levels must not settle the expenditures exceeding the revenues.

3. The lower-level budget shall not include the authorized allocations in the final statement of accounts of its budget; at the end of the year the lower-level agency shall make a report on the situation of the use of the authorized funds and send it to the higher-level financial agency.

4. The annual statements of final accounts sent to the competent agency must be attached with the report on account analysis, the balance sheet of the accounting accounts certified by the State Treasury agency where the units has an account.

Article 65.- Any remainder of the budget of the administration of any level after its final accounts are made shall be handled as follows:

1. Fifty per cent (50%) of the central or provincial budget remainder shall be deducted and transferred to the financial reserve fund and the other fifty per cent (50%) to the revenues of the following year�s budget. In cases where the financial reserve fund has reached the maximum amount defined in Point c, Clause 2, Article 56 of this Decree, the excess amount shall be transferred to the revenues of the following year�s budget.

2. One hundred per cent (100%) of the district or commune budget remainder shall be transferred to the revenues of the following year�s budget.

Article 66.- The order of making, sending and approving the annual statements of final accounts of the budget drafting units is defined as follows:

1. The lower-level budget drafting unit shall have to make statements of budget final accounts according to the prescribed forms and send it to the higher-level budget drafting unit; within 20 days from the date of receipt of the final statement of accounts, the higher-level budget drafting unit shall have to consider and approve it and notify the lower-level budget drafting unit of its decision. If after ten days from the date it receives the decision of the higher-level unit, the lower-level drafting unit has no other different opinion, it shall be assumed to have accepted the decision and shall implement it.

2. The level I budget drafting agency shall have to synthesize and prepare the annual statements of final accounts (including its own final statement of accounts and the statements of final accounts of the attached lower-level budget drafting units) and send them to the financial agency of the same level.

3. The financial agency shall have to consider and approve the annual statements of final accounts of the level I budget drafting units directly attached to the central Government not later than 10 days (for the district level); 20 days (for the provincial level); 30 days (for the central level) from the date of receipt of the statements of final accounts and notify the concerned units of the decision thereon. If , after 10 days from the date of receipt of the financial agency�s decision on the annual statements of accounts, the concerned unit has no other opinion, it shall be assumed to have accepted the decision and shall implement it.

During the process of considering and approving the final statements of accounts, the financial agency shall be entitled to participate in considering those of the lower-level budget drafting units attached to the budget drafting unit of the same level.

4. In cases where the concerned unit disagrees with the financial agency�s decision on the statements of final accounts, it must submit its opinion to the People�s Committee of the same level (if it is a budget drafting unit attached to the local administration of any level) or submit it to the Government (if it is a budget drafting unit attached to the Central Government) for decision. Pending a decision of the People�s Committee of the same level or of the Government, all the decisions of the financial agency must be complied with.

5. The agency tasked to collect budget revenues must organize the accounting of such revenues; prepare the annual final statements of accounts of State budget revenues and send them to the higher-level management agency and to the financial agency of the same level.

Article 67.- The order of making, sending and approving annual final statements of accounts of budget revenues and expenditures of the administration of various levels is defined as follows:

1. The commune financial service shall have to make the commune�s annual statement of final accounts of budgetary revenues and expenditures and submit it to the commune People�s Committee for submission to the commune People�s Council for approval.

After the statement of final accounts is approved by the commune People�s Council, it shall be made in 04 copies and sent to the People�s Council, the People�s Committee of the commune and to the district Financial Service.

2. The district Financial Service shall have to verify the final statement of accounts of the commune budget�s revenues and expenditures; make the final statement of accounts of the district budget revenues and expenditures; synthesize the reports on State budget revenues in the district area; prepare the final accounts of the district budget expenditures (including the district and commune budget expenditures) and submit them to the district People�s Committee for submission to the district People�s Council for approval. After the annual final statement of accounts is approved by the district People�s Council, it shall be made in 04 copies and sent to the People�s Council, the People�s Committee of the district and to the provincial Financial and Pricing Service.

3. The provincial Financial and Pricing Service shall have to verify the final statements of accounts of the district budget revenues and expenditures; make the final statement of accounts of the provincial budget revenues and expenditures; synthesize the reports on the State budget revenues in the province�s territory; prepare the final accounts of the provincial budget expenditures (including the provincial, district and commune budget expenditures) and submit them to the provincial People�s Committee for submission to the provincial People�s Council for approval, and concurrently to the regional State auditing agency. After the annual final statement of accounts is approved by the provincial People�s Council, it shall be made in 04 copies and sent to the People�s Council, the People�s Committee of the province and to the Ministry of Finance.

4. The Ministry of Finance shall have to verify the final statements of accounts of the provincial budget revenues and expenditures; make the final statement of accounts of the central budget revenues and expenditures and synthesize and make the general final statement of accounts of State budget revenues and expenditures and submit them to the Government for submission to the National Assembly for ratification, and concurrently to the State auditing agency.

Article 68.- With regard to the capital construction investment projects and the national projects and programs, the investors and the project managers must make the accounting, reports and final accounts in accordance with current regulations:

1. At the end of the budget year, with regard to the completed capital construction projects and national projects and programs, the investors or project managers must make a general final statement of accounts of all the capital sources, a report on the situation on the capital utilization according to current regulations and send them to the capital investment allocating agency and the agency competent to approve it; if the capital construction project or national program has not yet been completed, at the end of the year the investor must make a final statement of accounts of the allocated amount of capital, a report on the utilization of such amount and the implemented volume of work and send them to the investment capital allocating agency and the financial agency.

2. For important capital construction projects, the investors must make a final statement of accounts and submit it to the Government for submission to the National Assembly.

Article 69.- During the process of verifying and approving the statements of final accounts of the budgetary revenues and expenditures of the various agencies and units, the financial agency shall have to refund the amounts already paid to the budget but not in accordance with the provisions of law and be entitled to cancel or recover the expenditures which do not comply with the prescribed regime and issue orders on immediate payment to the State budget in accordance with the prescribed regime.

The budget of any level that collects illegal revenues shall have to refund them, such refunded revenues must be accounted for as a reduction in the budget revenues and when illegal expenditures are canceled or recovered, they must be accounted for as a reduction in the budget expenditures.

Article 70.-

1. Time limit for submitting accounting reports and quarterly and annual statements of final accounts:

a/ The time limit for submitting monthly accounting reports and quarterly statements of accounts shall be defined by the Minister of Finance.

b/ The annual final statements of accounts must be sent to the financial agency not later than 30 days from the end of the year (for the level I budget drafting units of district level), 60 days (for level I budget drafting units of provincial level) and 90 days (for the level I budget drafting units of central level).

c/ The annual statements of final accounts of the lower-level budgets shall be sent to the higher level not later than January 31 of the following year (for commune final statements of accounts); not later than February 28 of the following year (for district final statements of accounts) and not later than March 30 of the following year (for provincial final statements of accounts).

2. In cases where the budget drafting units and the lower-level budgets fail to send quarterly and annual final statements of accounts on time, the financial agency shall be entitled to temporarily suspend the allocation until it receives the statements of final accounts, except a number of urgent expenditures to be decided by the competent level.

Article 71.- In cases where an accounting unit is dissolved, the head of the unit and the person in charge of accounting work in the unit shall have to settle all the revenues and expenditures; make and send the accounting report and the final statement of accounts as of the time of dissolution in accordance with the regulations of the accountancy reporting regime. Only after the head of the unit and the person in charge of accounting work in the unit complete the accounting report and the final statement of accounts they can be transferred to other jobs.

Article 72.- The auditing of annual final statements of accounts of the budget drafting units and the budgets of lower-level administrations shall be performed by the State audit agency in accordance with Articles 69, 70 and 74 of the Law on the State Budget.

Article 73.- The State Treasury of various levels shall have to practice cost-accounting accountancy in an accurate, honest, timely and adequate manner of the State budget revenues and expenditures in accordance with the State budget accountancy regime and the current State budget classification; periodically make reports on the budget fund receipts and expenditures according to the State budget accounting forms defined by the Minister of Finance and send them to the higher-level State Treasury agency, and concurrently to the financial agency of the same level. The data on the State budget revenues and expenditures in the accounting reports of the State Treasury of any level must conform to the data in the reports on the State budget revenues and expenditures of the financial agency of the same level.

Chapter VI

IMPLEMENTATION PROVISIONS

Article 74.- The drafting, implementation and making of final accounts of a number special expenditures in the defense and security fields shall be done under a separate regulation of the Government.

Article 75.- This Decree takes effect from the budget year of 1997. The earlier provisions of the Government, the Ministries, ministerial-level agencies, agencies attached to the Government which are contrary to this Decree are now annulled.

The Ministry of Finance and the concerned Ministries shall have to guide and organize the implementation of this Decree.

Article 76.- The Ministers, the Heads of the ministerial-level agencies and the agencies attached to the Government and the President of the People�s Committees of the provinces and cities directly under the Central Government shall have to implement this Decree.

On behalf of the Government

For the Prime Minister

Deputy Prime Minister

PHAN VAN KHAI